Our experience and other usefull information regarding the letting and management of student accommodation with specific reference to the suburbs surrounding the University of Johannesburg (UJ), Wits and AFDA.

Saturday, June 30, 2012

On average, in the Braamfontein area, a small studio or one bedroom flat costs a rental of just R2 500 per month.

South African
universities are struggling to find suitable accommodation and many
institutions have now reached student accommodation crisis levels.
According to Seeff Randburg, students come from all over the country to attend universities in the main centres.
In Gauteng particularly, students are faced with a chronic shortage of safe, secure and affordable accommodation.
Academic institutions have identified the problem as being one of great concern.
Appeals for assistance to the Department of Higher Education, citing
the effect of inappropriate or no accommodation near educational
institutions on academic performance, resulted in various research
projects that clearly indicated that many students are forced to live in
appalling conditions, says the agency.
They are often far away from their universities, while many others
tolerate unsafe, overcrowded, unhygienic accommodation not conducive to
studying.
In addition, it was clear that there was a fair amount of exploitation
taking place where students were over-charged for living in bad or slum
conditions with corrupt landlords taking their rentals and then
disappearing, leaving students without basic amenities, the agency says.
Disadvantaged students in particular are finding that monthly rental costs are using up the bulk of their monthly budgets.
In 2009, the Department of Higher Education confirmed that the shortage
was chronic and that the lack of supply of student housing was one of
the primary causes for poor performance and the high dropout rates at
some universities.
Despite the increased allocations towards upgrading and new residences
at some universities, rising maintenance costs, ageing residences and
other problems have limited the growth options for on-campus student
housing.
Seeff notes that many universities simply do not have sufficient space.
Some universities have resorted to outsourcing their accommodation needs to private developers and building managers.
With university budgets facing major constraints and cutbacks from
national government, many have prioritised academic and teaching
facilities ahead of upgrading or building new university residences.
According to statistics from the Department of Higher Education, out of
a student population of 530 000, there is currently only enough student
accommodation for 100 000 students – this barely meets 18 percent of
the demand, says Seeff.
As the demand for student accommodation far outweighs the supply, there
are excellent investment opportunities available in this market.
Although the buy-to-let market is currently depressed, student
accommodation is one section of this market that is proving to be an
excellent buy-to-let option, usually for a relatively small capital
outlay.
Seeff points out that a number of visionary property developers are
rejuvenating city centres across the country by turning old office
blocks into modern one-bedroom or studio apartments for rental to
university students.
Buildings are within walking distance of the universities and are safe,
clean, well controlled in terms of management, noise and respect for
property, and they provide excellent accommodation for students at a
reasonable price.
On average, in the Braamfontein area, a small studio or one bedroom flat has a rental of just R2 500 per month.
Private investors are also buying properties near the universities, particularly near University of Johannesburg Wits and Tukkies.
They are buying these either for their own children while they study at university or to let to other students.
Parents who buy to accommodate their children during their studies have
found that the appreciation in value is excellent, often selling the
properties at almost double the price they paid for them (dependent on
the number of years they owned the property).
Many students prefer to reside off-campus or in sectional title units with more privacy than the residences.
In recent years, astute parents have realised that rather than merely
paying rent for their children’s accommodation, they can invest in an
asset that can yield good rental returns given the current ongoing
demand, according to Seeff.
Braamfontein, near Johannesburg’s inner city, is rapidly emerging as a
vibrant growth node and is experiencing an overall surge in the demand
for property.
This trend towards revitalisation comes on the back of demand and supply of student accommodation.
It has been and is still being driven by the enormous ongoing demand
for accommodation from students attending Wits University and the
University of Johannesburg as well as other educational institutions in
the area such as Damelin and Lyceum College, the agency says.

The demand for properties suitable for student accommodation in the nearby Westdene, Melville and Auckland Park areas is also high, with particular emphasis on the sectional title sector, says Pat Evans, sales manager at Seeff Randburg.
“Properties purchased which are suitable for this kind of usage are
showing a higher than average return on investment plus higher capital
returns for the investor,” says Evans.
Although the rate of new development has slowed dramatically in most
parts of the country on the back of the economic downturn, Hatfield in Pretoria remains relatively busy in terms of residential and corporate property activity.
This has been partially driven by the ceaseless demand for student
accommodation and partly by the area’s popularity amongst international
embassies and trade missions, according to Seeff.
Hatfield's growth has also been boosted by its proximity to a Gautrain station.
Here too, a trend has developed whereby old buildings are being
demolished or renovated and replaced with blocks of flats or offices.
The buy-to-let student apartments are proving to be excellent investments.
Due to the rapid expansion of the University of Pretoria and the acute
shortage of vacant land for student housing development in the Hatfield
precinct there has been of late, a marked increase in the demand for
student accommodation near or around the University, says Pieter
Bezuidenhout, property consultant, Seeff Pretoria East.
He says with most of the old houses in Arcadia
and Hatfield already converted into student communes and with the
present new developments targeting student rental accommodation only
coming onto stream later in the year or next year, the shortage for
student accommodation has become dire.
The situation has been further aggravated by the fact that the
development of Hatfield as Pretoria’s new CBD and the opening of the
Hatfield Gautrain station have led to young professionals competing with
the students for sectional title units either to rent or to purchase.
Residential property prices and rentals in Hatfield remain high and
will do so in the future, if compared to the rest of Pretoria.
As a result both purchase and rental prices in the Hatfield area are predicted to increase even further in future, he adds.

Tuesday, June 26, 2012

A new insurance product launched to South Africa's 800,000
registered students aims to specifically tackle the everyday
vulnerabilities that can halt a learner's studies in their tracks.

Given
the typical risks and exposure to crime that is associated with life on
campus and within shared student accomodation, the affordable cover
(unmatched at R99 per month) seeks to fill a gap left by other insurers
in covering critical items such as cell phones, laptops, and assisting
with covering student fees lost that cannot be covered in the event of
death of a sponsor, bursar or parent.

Currently a great number of students are on the government financial
aid scheme, NSFAS, and have limited recourse in case of theft of their
communication devices, placing their studies at risk at an all-important
time in their lives.

In conducted national focus groups, these were regarded as the most valuable and vital goods for successful learning.
In addition to this, a distinct need for value added products such as
medical, legal, tenant and personal liability was identified by the
student tenants, as well as the landlords that accommodate them.

While the policy is specifically aimed at the uninsured or
underinsured student market, accommodated in on- or off-campus, shared
or private accommodation, the product also can also cover the university
or academic institution, and the landlord, while a sponsor receives
cover should the student die or be permanently injured - vital if the
student has a student loan.

Landlords can for the first time mitigate their risk without
affecting their no-claim bonus or claims ratios. They can add value to
their accommodation by offering the insurance as an addition to the
lease agreement.
Says Firststay Insurance Brokers Chairman Caj van Zyl, "Our aim with
4sho was to create an insurance policy that was priced below R100 per
month and that covered the basic perils and needs associated with the
student accommodation market."
"Typically this market is price sensitive and relevant insurance
product options are non-existent. Value for money is at the top of the
priority list."
"With the rapidly growing student accommodation market and its
associated risks, the need for a product such as 4sho has become more
important than ever."
He adds, "Landlords also require a product to mitigate the risks
associated with housing students. We have always been concerned with
having to potentially deal with medical emergencies or trauma suffered
by our tenants on our properties."

"They can now offer tenants a 24hour call centre that will deal with
any medical emergency over the phone and if deemed necessary the
operator will dispatch emergency medical services."
"Should we have a robbery on the property a tenant's most valuable belongings are insured."
"Should they have a problem tenant that has caused serious damage to
our property, landlords are covered up to R100,000 under the tenant
liability clause. This is all highly relevant in this country."

The 4sho policy is available for purchase online at www.firststay.co.za
or through leading student accommodation rental and management agencies
nationally. Our call centre can be contacted for any advice or queries
0860 103 103.

As the
student population increases, demand also rises for student housing
which so far is experiencing a critical shortage, creating excellent
investment opportunities in South Africa.

Universities throughout the country are faced with an
ever-increasing problem as their students struggle to find suitable
accommodation and many institutions have now reached student
accommodation crisis levels.
Students come from all over the country to attend universities in the
main centres and in Gauteng in particular, students are faced with a
chronic shortage of safe, secure and affordable accommodation.

Academic institutions have identified the problem as being one of
great concern. Appeals for assistance to the Department of Higher
Education, citing the effect of inappropriate or no accommodation near
educational institutions on academic performance, resulted in various
research projects that clearly indicated that many students are forced
to live in appalling conditions. They are often far away from their
universities, whilst many others tolerate unsafe, overcrowded,
unhygienic accommodation which is not conducive to studying.
In addition, it was clear that there was a fair amount of
exploitation taking place where students were over-charged for living in
bad or slum conditions with corrupt landlords taking their rentals,
then disappearing, leaving students without basic amenities.
Disadvantaged students in particular are finding that monthly rental
costs are using up the bulk of their monthly budgets.

In 2009, the Department of Higher Education confirmed that the
shortage was chronic and that the lack of supply of student housing was
one of the primary causes for poor performance and the high dropout
rates at some universities.

Despite the increased allocations towards upgrading and new
residences at some universities, rising maintenance costs, ageing
residences and other problems have limited the growth options for on
campus student housing. Many universities simply do not have sufficient
space. Some universities have resorted to outsourcing their
accommodation needs to private developers and building managers.

With university budgets facing major constraints and cutbacks from
national government, many have prioritised academic and teaching
facilities ahead of upgrading or building new university residences.
According to statistics from the Department of Higher Education, out
of a student population of 530 000, there is currently only enough
student accommodation for 100 000 students – this barely meets 18
percent of the demand.

Thus, as the demand for student accommodation far outweighs the
supply, there are excellent investment opportunities available in this
market. Although the buy-to-let market is currently depressed, student
accommodation is one section of this market that is proving to be an
excellent buy-to-let option, usually for a relatively small capital
outlay.

A number of visionary property developers are rejuvenating city
centres across the country by turning old office blocks into modern
one-bedroom or studio apartments for rental to university students.
Buildings are within walking distance of the universities and are safe,
clean, well controlled in terms of management, noise and respect for
property, and they provide excellent accommodation for students at a
reasonable price. On average, in the Braamfontein area, a small studio
or one-bedroom flat costs a rental of just R2 500 per month.

Private investors are also buying properties near the universities,
particularly near UJ, Wits and Tukkies. They are buying these either for
their own children while they study at university or to let to other
students. Parents who buy to accommodate their children during their
studies have found that appreciation is excellent, often selling the
properties at almost double the price they paid for them (dependent on
the number of years they owned the property).

Many students prefer to reside off-campus or in sectional title units
with more privacy than the residences. In recent years, astute parents
have realized that rather than merely paying rent for their children’s
accommodation, they can invest in an asset that can yield good rental
returns given the current ongoing demand.

Braamfontein, near Johannesburg’s inner city, is rapidly emerging as a
vibrant growth node and is experiencing an overall surge in the demand
for property. This trend towards revitalisation comes on the back of
demand and supply of student accommodation. It has been and is still
being driven by the enormous ongoing demand for accommodation from
students attending Wits University and the University of Johannesburg as
well as other educational institutions in the area such as Damelin and
Lyceum College.
“The demand for properties suitable for student accommodation in the
nearby Westdene, Melville and Auckland Park areas is also high, with
particular emphasis on the Sectional Title sector. Properties purchased
which are suitable for this kind of usage are showing a higher than
average return on investment plus higher capital returns for the
investor,” says Pat Evans sales manager at Seeff Randburg.

Although the rate of new development has slowed dramatically in most
parts of the country on the back of the economic downturn, Hatfield in
Pretoria remains relatively busy in terms of residential and corporate
property activity. This has been partially driven by the ceaseless
demand for student accommodation and partly by the area’s popularity as
amongst international embassies and trade missions. Hatfield's growth
has also been boosted by its proximity to a Gautrain station. Here too, a
trend has developed whereby old buildings are being demolished or
renovated and replaced with blocks of flats or offices. The buy-to-let
to student apartments are proving to be excellent investments.

Due to the rapid expansion of the University of Pretoria and the
acute shortage of vacant land for student housing development in the
Hatfield precinct there has been of late, a marked increase in the
demand for student accommodation near or around the University,” says
Pieter Bezuidenhout, property consultant, Seeff Pretoria East.

“With most of the old houses in the Arcadia and Hatfield already
converted into student communes and with the present new developments
targeting student rental accommodation only coming onto stream later in
the year or next year the shortage for student accommodation has become
dire. The situation has been further aggravated by the fact that the
development of Hatfield as Pretoria’s new CBD and the opening of the
Hatfield Gautrain station have led to young professionals competing with
the students for sectional title units either to rent or to purchase.
As a result, residential property prices and rentals in Hatfield remain
high and will do so in the future, if compared to the rest of Pretoria.
As a result both purchase and rental prices in the Hatfield area are
predicted to increase even further in future.”